Midem day 3 Wrap: Warner Music, blockchain, copyright and Alibaba

Streaming’s role in the global music industry was on the agenda for the third day of Midem, with keynotes from Warner Music Group and Alibaba, as well as a host of panels on new technologies like blockchain and trends like playlist curation.

Warner Music Group’s Stu Bergen talked about his company’s view on the market in 2016 and beyond. “We’ve weathered a lot of change. I think we have reason to be optimistic right now, the business showed some growth last year,” he said. “I think we still have some challenges fighting to get the real value of music realised… People hide in the dark shadows of safe harbour. But we’re quite optimistic.”

Bergen’s colleague Iñigo Zabala talked about WMG’s burgeoning business in Latin America. “We at Warner believe in emerging markets, because we think that not believing in emerging markets is like not believing in the future of the world,” said Zabala.

“Streaming is giving us the opportunity to invest in international acts in a way that just three years ago would have been impossible… Streaming in Mexico now represents the third [biggest]market for Spotify, and streaming represents 70% of the [overall Mexican music]market. That shows you the potential of this new economy, of this new industry.”

The pair were joined by Brazilian star Anitta, who talked about her decision to manage herself. “When we are just a little calm and patient, we can think more, and make the things happen better,” she said. “Stopping, thinking with patience and calm, so I opened my own business. I have my employees and I have other people helping me. It’s not easy because I have to dedicate my life to do this… I make everything happen by myself. It’s difficult, but I prefer it.” (Full report on Music Ally)

Alibaba Music’s Gao Xiaosong took the second keynote slot, talking about the Chinese e-commerce giant’s musical moves, as well as the wider outlook for copyright in China, with the government there having implemented legislation that works in the favour of musicians.

“China is a developing country. So our government decided to sacrifice those content industries to help the internet business industry, because ‘the internet is the future’,” he said. “The first three or four big internet companies from China, they all grabbed some content. Music, movies, TV shows, news, photos. The government said ‘okay, be patient, let them be big’. Now they’re very big now. They’re monsters now. So the government made the decision last year: ‘Okay, you have to pay for copyrights’. And from last November, we don’t have any piracy any more.”

Xiaosong talked about Alibaba Planet, a new app from Alibaba that connects musicians with their fans. It’s aimed at all levels of artist, including the “idols” that are a key part of Chinese pop culture.

“Western idols are more like heroes. They’re strong, muscle, beefy, they’re more like protectors. East Asian idols: Korean, Chinese, they’re pale, they’re skinny, they’re like protectees! So people always want to spend money on your protectees!.. And people want to pay a lot,” he said. “We promote stars because we have big data: we know where are your fans… We know everybody in China.” (Full report on Music Ally)

Earlier in the day, Midem’s Innovation Factory stage hosted a run of sessions exploring the world of streaming, including brands, curated playlists and livestreaming apps like Periscope and YouNow.

In the livestreaming session, consultant Karen Allen explained that the new trend is about more than simply streaming live video online: it’s about the interactivity, with the audience able to chat to the broadcaster (artists included) and to other viewers.

“People do pay for this. People do pay for content. It’s not great content, it’s fun content. It’s engaging: it’s hanging out. This really resonated with me, just from being in the music industry so long and watching revenues decline,” said Allen.

Jonathan Kalter, who manages Pentatonix, said the interactivity is a big draw. “It allows you not just to speak to an audience, but it also allows the audience to participate with you,” he said. Pentatonix did an album-launch stream on YouNow recently, where fans could “go split-screen” to ask questions. “With YouNow it was a combination of their base being told about our stream, it was our Twitter and Facebook following being pushed there. And it worked,” he said.

Gregor Pryor of law firm Reed Smith talked about some of the legal issues being raised by the growth in livestreaming, warning music rightsholders to be cautious about stamping down on copyright issues.

“There’s a few questions from a legal perspective. You can’t put the genie back in the bottle: you’re not going to stop it,” said Pyror. “Rights owners who believe that it can be stopped are wrong, and it won’t stop.” (Full report on Music Ally)

The panel on music curation and streaming playlists created sparks from start to finish. Slice Music’s Justin Barker criticised the process by which independent labels pitch their tracks in to Spotify for inclusion on its big in-house playlists.

“It’s quite limited, you’ve basically got a form that all of the labels have access to and a quota of tracks you can pitch to them a week, and a limited space available for context around that track: why they should add it to their playlists,” he said. “For smaller labels, there’s no feedback, and they feel it’s like a black hole that they send their pitches to, and maybe one day one of their tracks turns up on one of the playlists.”

Sammy Andrews, who is closely involved with efforts to create a playlists brand for independent labels, said that this is why the indie community needs to come together for curation.

“Being the last to the table with this is a good thing, as we can see where they f**ked up… I’m not concerned that we’re last to the table. When we come out of the doors with an independent playlist brand, it will be an incredible playlist brand,” she said.

Deezer France’s MD Alexis de Gemini maintained that his service gives equal priority to independents and major labels when deciding which tracks to put in the playlists created by its in-house editors.

“If we have experts in music selection, it’s their job to choose the next big song. Whether it’s a major company or an independent, we don’t give a f**k!” said de Gemini. (Full report on Music Ally)

The first Copyright Summit also kicked off at Midem today, with Susan Butler of Music Confidential encouraging delegates to “be prepared for a huge fight” over key issues such as the value gap, whereby revenue generated from platforms like YouTube is “not big enough for people to live off. So it’s more than ever important to check who’s talking.”

Centralised European platform Armonia was agreed to be a positive step towards fuller transparency in a key Copyright Summit panel (above), with Universal Music Publishing/the ICMP’s Andrew Jenkins acknowledging the venture as “probably the most transparent licensing system on the planet.” Tosé Brizo, of Portugal’s SPA, enthused that Armonia had, by “giving us access to information we didn’t have before, allowed us to do deals we couldn’t have done before;” 10 new deals have been signed with DSPs they didn’t know existed before joining Armonia, he said.

Later in the day came the much-anticipated blockchain session, with a panel of experts getting practical with what blockchain technology could really mean for the music industry. “Ultimately the idea is to be able to create a more efficient recording device: an accounting ledger for transactions. It’s a shared database, that’s decentralised, and many people can write to,” explained Bruno Guez of Revelator.

“The blockchain is inevitable.. it isn’t a simple convenience, it’s necessary to create a level playing field to endure the system is fair to everybody, wherever they are in the world… the block is here to stay, I think,” added Vinay Gupta of Ethereum, while Joe Conyers III of Downtown Music Publishing said the technology has much to offer the music industry. “We’re going to have much more real-time and truthful transactions… There’s a lot of black boxes in the world of music, a lot of siloed databases that are in different states of disrepair,” said Conyers. “It’s going to grow the pie in ways we never thought of. We’re going to have a much bigger industry, and much cleaner data.”

Imogen Heap has been working on her own blockchain-based project called Mycelia, and she sees such pilots as crucial to getting blockchain-based music technology off the ground. “It might be small, it might be a few hundred people, but begin that pilot. Then we can go ‘look, PROs. Look labels. This isn’t something to be frightened of, it’s something to be excited about… We can see the music industry flourish, rather than feeling like it’s just grinding to a halt.” (Full report on Music Ally)

Data was very much on the agenda this afternoon. A session on “the data-driven future of music” covered topics from marketing to A&R. Sony Music’s Daniel Hall said that industry expectations around big data have matured. “It’s not that it’s necessarily going to solve everything… data’s gone from being a tool that we use to being almost a utility that underpins everything that we do,” he said.

“Big data won’t make the decision for you. As a business we’ve accepted that, and we’ve understood that it’s a utility that can help us in our decision-making. Yes, we have big data, but we need big insight to go with that.”

Stef Pascual of Red Essential said that big data can fuel big partnership with brands. “It really can be like online dating! You get some parameters from your data and your artists: you get the demographics and know what audience your artist has, and you meet a brand that has an aspirational audience they want to reach, and their own audience. And is there a match?” she said.

Simon Wheeler of Beggars Group was unimpressed by suggestions that data has a big role to play in the A&R process, however. “If you let the data drive your A&R, you’re going to ave a world full of things like Justin Bieber, very mainstream and easy. That’s not a world any of us want to live in. We want to live in a rich, creative and diverse world,” said Wheeler.

“A company like Beggars has a role in trying to find those artists that are unique and special, and maybe a little bit alien to people the first time they hear them, but which have the potential to reach a much larger audience. We have the role of finding things that people don’t know they’re going to like… and data is not very good at doing that stuff. That’s why people who are great A&Rs can see down the line about what this artist is going to turn into. I’ve never seen any data that can do that.” (Full report on Music Ally)

Later, a panel looked at the opportunities offered by developing markets in Africa. For Sony Music West Africa’s Michael Ugwu, independents selling local repertoire and telcos pushing music services are dominating African markets right now. “We’re seeing how we can introduce international artists to those markets,” he said. Ugwu added that local telcos are currently keeping DSPs like Deezer our of their markets, and sometimes “keeping 80% of their music service revenues.” For Believe Digital’s Romain Becker, three things are required for success in Africa: catalogue; web/data access (which is currently improving); and “strong billing systems, to give people access to services. If we can get these things right, we will have a really dynamic market.”

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